The Daylight theft of Mopani Copper Mines
……Article 210 (2) of the Constitution of the Republic of Zambia states that; (2) A major State asset shall be sold, transferred or otherwise. disposed of, as prescribed, subject to the approval of the National Assembly signified by a vote of at least two-thirds of the Members of Parliament…..
By Amb. Emmanuel Mwamba
Mopani Copper Mines;
● Sold without parliamentary approval as required by Article 210 (2) of the Constitution of the Republic of Zambia.
● Sold to a company that did not participate in the bidding process.
● No money given to the treasury.
● No cash paid for the 51% shares.
● IRH merely committed to investment pledge of $1.1billion.
● Mopani had just invested $4.5 billion in new shafts, new smelter (2014-2021). This was a well capitalised mine.
TIMELINE
March 2020-Since 2015, Glencore, whose directors were facing criminal charges and prosecution from the FBI in the USA and the Serious Frauds Office in London make dramatic decisions. The embattled mining giant had earlier announced that it had started the sales process for two of its copper mines in Australia and Chile.
The firm’s Australian copper mine in Cobar, New South Wales, and its Lomas Bayas copper mine in the Atacama desert in Chile were put up for sale.
GLENCORE also sold two zinc mine in Namibia and Burkina Faso for $400m to Trevali Mining Corporation.
Glencore further sold its Optimum coal mine in South Africa to Tegeta Exploration and Resources for $136 million.
GLENCORE IN ZAMBIA
Glencore had invested heavily in Mopani Copper Mine.
Mopani Copper Mine had since 2014 sunk and equipped three (3) brand new shafts to replace the old infrastructure at both Nkana and Mufulira mine sites, which dates back to the 1930s.
The three new shafts were Syclinorium and Mindola Deeps Shafts at Nkana Mine in Kitwe and The Henderson Shaft at Mufulira Mine site.
Mopani had also built a brand new Concentrator at Nkana mine site, The New Syclinorium Concentrator.
The new infrastructure was expected to extend the life of the mine by over 25 years, improve production efficiencies and safeguard the existing jobs.
As at 2021, this was one of the well-invested and well-capitalised mine with envious multi-million dollar assets.
Mopani only needed about $300 million to complete projects started by Glencore and boost annual production fivefold, to 200,000 tons.
March 2021- Glencore announced that its subsidiary Carlisa Investments, in which Glencore holds 81.2% of the shares, had completed the sale to ZCCM Investments Holdings of its 90% interest in Mopani Copper Mines.
As previously announced, the consideration of the transaction was US$1 and transaction debt of $1.5 billion.
August 2021-Mopani Copper Mines PLC was wholly owned by ZCCM-IH.
ATTORNEY GENERAL FALSELY CLAIMS THAT MOPANI COPPER MINES WAS NOT A STATE-OWNED ENTITY
In his Opinion to the Minister of Mines, the Attorney General made false claims that Mopani was neither a State institution nor a Public body.
But let’s examine, Article 266 of the Constitution of Zambia (Amendment) Act No. 2 of 2016 that defines a state institution and a public body as follows:
“State institution” includes a ministry or department of the Government, a public office, agency, institution, statutory body, commission or company in which the Government or local authority has a controlling interest, other than a State organ”.
It is not in dispute that as August 2021, ZCCM-IH was the majority shareholder of Mopani (99% shareholding) and that ZCCM-IH is a separate legal entity at law.
However, the Government through the Minister of Finance exercises ultimate and effective control over this separate legal entity.
Here is the explanation. ZCCM-IH was majority owned by the Industrial Development Corporation (IDC) as beneficial owner.
The beneficial owner is a person or entity that exercises ultimate and effective control.
ZCCM-IH and Mopani were therefore, effectively controlled the Minister of Finance by virtue of the Minister of Finance (Incorporation) Act Cap 349 of the Laws of Zambia.
Section 7 of Cap 349 prescribes that;
“All property vested in the Minister of Finance under or by virtue of the provisions of this Act shall, except where and to such extent as the property is held on other trusts, be held in trust for the President on behalf of the Government.”
A review of the shareholding structure of Mopani reveals that, at this stage, it was a subsidiary of ZCCM-IH.
Thus ZCCM-IH under paragraph (d) of the definition of “control” aforementioned is a holding company that exercises control over Mopani.
However, the Companies Act equally reinforces the reality of ownership and control structures pertaining to legal persons by a natural person in the introduction of the concept of “beneficial owner/ ownership”.
This concept (of beneficial owner) seeks to encourage and increase transparency of legal persons and arrangements through disclosure of who (natural person) ultimately owns, controls, exercises substantial interest in, or receives substantial economic benefit from a body corporate.
Section 3 of the Companies Act defines “control” as the control of a company by a person who—
(a) beneficially owns more than twenty-five percent of the issued share capital of the company;
(b) is entitled to vote a majority of the votes that may be cast at a general meeting of the company, or has the ability to control the voting of a majority of those votes, either directly or through a controlled entity of that person;
(c) is able to appoint or to veto the appointment of a majority of the directors of the company;
(d)is a holding company and the company is a subsidiary of that company as provided for in this Act;
(e) in the case of a company that is a trust, has the ability to control the majority of the votes of the trustees, to appoint the majority of the trustees or to appoint or change the majority of the beneficiaries of the trust; or
(f) has the ability to materially influence the management policy or affairs of the company in a manner comparable to a person who, in ordinary commercial practice, can exercise an element of control referred to in paragraphs (a) to (e).
Therefore, a company in which the Government has a controlling interest is a state institution.
PRESIDENT HAKAINDE HICHILEMA’S GOVERNMENT DISPOSES OFF SHARES IN MOPANI
TIMELINE
April 2022- ZCCM-IH said it was seeking a financial adviser to restructure Mopani Copper Mine and help find a new external investor for the mining complex, which Glencore had sold back to the state in January 2021.
June 2022- ZCCM-IH hires investment bank, Rothschild & Co, as a consultant for Mopani Copper Mines. The scope of the consultant was to offer a straregic review and propose restructure “to ensure its sustainability and continued development”.
May 2023- Dolika Banda, who was appointed to the board of ZCCM-IH in December 2021,
resigns as Non-Executive Director and Board Chairperson of ZCCM Investments Holdings, effective May 5, 2023.
A renowned international banker, Dolika’s sudden resignation as ZCCM-IH Board Chairperson at the height of business decisions regarding Kansanshi Copper snd Gold Mine, Konkola Copper Mines and Mopani Copper Mines, raised industry concerns with sources citing gross interference and proposed corruption from State House.
July 2023- China’s Zijin Mining, Norinco Group, Sibanye Stillwater and an investment vehicle owned by ex-Glencore Plc officials are announced as short-listed to buy Mopani.
October 2023-Sibanye Stillwater which was among investors bidding to buy Mopani Copper Mines, said the amount of money required to expand output and run the Zambian assets profitably was $1billion and would make it one of the biggest mines in Africa.
Neal Froneman, the CEO for the South African platinum mining giant, expressed optimism about investing in Mopani.
December 2023- Zambia announces the surprise selection of an unkown, non-bidder to the bidding the process.
A United Arab Emirates’ International Resources Holdings (IRH) was announced as the new strategic equity partner in Mopani Copper Mines.
IRH, was said or purported to be linked to Abu Dhabi’s most valuable listed company, International Holdings Company (IHC).IHC is a publicly-listed holding company in Abu Dhabi.
IRH pledged to invest funds into Mopani to help with short-term working capital and finance the completion of the mine development to unlock Mopani’s long-term potential as well as restructure the copper mine.
February 2024- The shareholders of ZCCM Investments Holdings Plc Board, referring to earlier cautionary announcements issued on 10 November 2023 and 30 November 2023 confirmed that it had approved International Resources Holding (IRH)RSC Limited, as the preferred Strategic Equity Partner for Mopani Copper Mines Plc.
ZCCM Investments Holdings Plc shareholders unanimously approved the Mopani Copper Mines Plc (Mopani) transaction where a new company, Delta Mining Limited (Delta), a now purported subsidiary of International Resource Holdings (IRH), had agreed to acquire a 51% shareholding in Mopani for a total investment of up to US$1.1 billion.
The announcement stated that ZCCM-IH will retain 49% shares in Mopani, with 3 out of 9 board seats (5 by Delta and 1 by GRZ), and thus continue to participate in the governance of Mopani and have full visibility of its operations.
CONCLUSION
President Hakainde Hichilema and the Minister of Mines and Minerals Development, Paul Kabuswe breached the Constitution and broke the law when they failed to take the transaction to Parliament for approval as required by the Constitution.
This is lierally a brand new and well capitalised mine and cannot be dispossed off in these unclear circumstances.
Further the deal to transfer shareholding of 51% shares to IRH and its purorted subsidiary Delta Mining Ltd has raised concerns with no discernible explanation from Government.
It is increasingly becoming clear that both IRH and Delta may be shell companies with its beneficial owners undisclosed. They were not part of the 10 bidders or part of the four final listed bidders.
The failure to pay for the shares and instead accept mere investment pledges robs the country of its assets abd resources.
This a scandal of monumental proportion and must be probed.